Induced demand and congestion are complex. A taxi is probably better than a car, but neither cars or taxis have enough capacity to viably challenge congestion. You need mass transit that runs frequently and isn't stuck behind cars.
There's still congestion to deal with, but a bunch of people whose main work has no set hours who can go 'it's raining, time to taxi some people who don't want to walk or cycle today' synergises well with active transport and transit.
The question was why they stay on the road when they're not delivering someone. If the issue isn't lack of parking, what is it?
If they travel by taxi there's only one car on the road - but the taxi has to do a third trip, going back from the city to the suburbs between passengers. That trip is likely to be made without a passenger - because in the morning rush hour, far more people want to go in one direction than the other.
Of course, in some cases taxis may help reduce congestion - transporting people to and from train stations, and allowing people who usually cycle to transport bulky items, might enable more car-free living.
The commuter and residential parking doesn't free up for Uber drivers if it's not being used by its primary customers.
Disclosure: Extrapolating from how it works in my town.
Cities already have absolutely massive amounts of their real estate dedicated to parking. The answer to this problem is not and never will be “more of the stuff that’s causing the problem”.
There are actually places in Beijing to wait for assignments outside of major clogged ring roads and arterials. But it really depends on the design of your city.
Thus, though it’s true that the impact of taxis on traffic is significant, the alternative is much worse. People still need to get around.
They quoted a professor who had, according to the article, the most accurate model of NYC traffic given a large number of variables e.g. number of commuters, taxis, buses, subway frequency etc.
A key take away was the a taxi (or Uber/Lyft etc) is much WORSE for traffic than a commuter car. Commuters drive in, park, leave their car all day then leave.
Taxis are constantly circling and looking for fares. IIRC the impact of a taxi was several multiples of the impact of a commuter on daily gridlock.
Now, I love Uber/Lyft for all of the regular reasons e.g. allows people in under-served areas get transportation, senior citizens and the disabled with more access etc.
The traffic impact, however, seems pretty substantial.